Hospital commercial payment levels in southeast Wisconsin compared favorably with the national average over the last 12 years, according to a study released Tuesday by the Greater Milwaukee Business Foundation on Health.
The study, conducted by consulting firm Milliman, found the average growth rate of payments to southeast Wisconsin hospitals between 2003 and 2014 was less than half the national average.
Here are four other findings from the study:
1. From 2003 through 2014, the average southeast Wisconsin hospital commercial payment levels increased approximately 45 percent, or 3.4 percent annually. This compares with a 93 percent total increase in the Hospital Component of the Consumer Price Index for the same period.
2. However, the study did find the average payment to southeast Wisconsin hospitals from private insurers increased 6.5 percent last year, while the national average increased 5 percent. It was the first time the average payment to southeast Wisconsin hospitals was higher than the national average since 2005, with five of the six health systems exceeding the increase in the national rate. Keith Kieffer, a management consultant with Milliman, said the increase in the average payment to southeast Wisconsin hospitals is likely due to hospitals with higher rates providing more medical services, according to a Milwaukee Journal Sentinel report.
3. From 2003 through 2014, southeast Wisconsin hospital per-unit operating costs (the day-to-day expenses of running a hospital) increased at a substantially lower rate than national indices, particularly in recent years. The average southeast Wisconsin hospital per-unit operating costs increased 18 percent from 2003 through 2014, or about 1.5 percent annually. This compares with increases in the Hospital Producer Price Index and the CMS Hospital Market Basket of 39 percent and 52 percent, respectively, from 2003 through 2014.
4. According to the report, the study also found from 2003 through 2014, payments for hospital care from private health insurers increased:
- 18 percent for Aurora Health Care in Milwaukee
- 48 percent for Glendale, Wis.-based Wheaton Franciscan Healthcare
- 53 percent for Columbia St. Mary's in Milwaukee
- 62 percent for Kenosha, Wis.-based United Hospital System.
- 64 percent for Froedtert Health in Milwaukee.
- 80 percent for Waukesha, Wis.-based ProHealth Care.